Strategy Analysis of Hp
4
MANAGEMENT DECISION 33,10
Analysis of strategy formulation and implementation at Hewlett-Packard
Rainer Feurer, Kazem Chaharbaghi and John Wargin Presents a number of approaches to strategy formulation and implementation which represent some of Hewlett-Packard’s best practices
Introduction
There is a general recognition that competitive environments are changing at an accelerating rate culminating in a high level of uncertainty. As a result, the critical success factors are constantly being challenged. This calls for a constant change in competitive strategies[1-3]. Subsequently, organizations can no longer afford to adopt a unidirectional or step-by-step approach to strategy development which entails several stages including data collection, development of strategic options, evaluation, selection and implementation. In the face of a high level of uncertainty and change there is a need for a dynamic approach in which strategy formulation and implementation are carried out simultaneously. This represents an ongoing process of analysing the competitive environments and developing strategic options together with their evaluation. This process should take into account the required implementation time-frame and the span of the strategic gap[4]. The need for moving towards a dynamic approach to strategy formulation and implementation is illustrated in Figure 1. Dynamic strategy formulation and implementation are realized when they are no longer regarded as centrally performed processes but as part of a continuous learning process such that the overall operations and supporting strategies are constantly aligned[5]. The fact that organizations worldwide are abandoning their central planning departments and dispersing the ownership of strategy formulation throughout their organizations is a clear indication of the significance of the dynamic approach. While the transfer of strategy ownership throughout the organization speeds up the formulation and
Management
MANAGEMENT DECISION 33,10
Analysis of strategy formulation and implementation at Hewlett-Packard
Rainer Feurer, Kazem Chaharbaghi and John Wargin Presents a number of approaches to strategy formulation and implementation which represent some of Hewlett-Packard’s best practices
Introduction
There is a general recognition that competitive environments are changing at an accelerating rate culminating in a high level of uncertainty. As a result, the critical success factors are constantly being challenged. This calls for a constant change in competitive strategies[1-3]. Subsequently, organizations can no longer afford to adopt a unidirectional or step-by-step approach to strategy development which entails several stages including data collection, development of strategic options, evaluation, selection and implementation. In the face of a high level of uncertainty and change there is a need for a dynamic approach in which strategy formulation and implementation are carried out simultaneously. This represents an ongoing process of analysing the competitive environments and developing strategic options together with their evaluation. This process should take into account the required implementation time-frame and the span of the strategic gap[4]. The need for moving towards a dynamic approach to strategy formulation and implementation is illustrated in Figure 1. Dynamic strategy formulation and implementation are realized when they are no longer regarded as centrally performed processes but as part of a continuous learning process such that the overall operations and supporting strategies are constantly aligned[5]. The fact that organizations worldwide are abandoning their central planning departments and dispersing the ownership of strategy formulation throughout their organizations is a clear indication of the significance of the dynamic approach. While the transfer of strategy ownership throughout the organization speeds up the formulation and
Management
References: 1. Porter, M., “Towards a dynamic theory of strategy”, Strategic Management Journal, Vol. 12, special issue, 1991, pp. 95-117. 2. Mintzberg, H., “The design school: reconsidering the basic premise of strategic management”, Strategic Management Journal, Vol. 11 No. 3, 1990, pp. 171-95. 3. Eisenhardt, K.M., “Speed and strategic choice: how managers accelerate decision making”, Cal ifornia Management Review, Vol. 32 No. 3, 1990, pp. 39-54. 4. Feurer, R. and Chaharbaghi, K., “Dynamic strategy formulation and alignment”, Journal of General Management, Vol. 20 No. 3, 1995, pp. 76-90, 1993. 5. Feurer, R. and Chaharbaghi, K., “Stragegy formulation, a learning methodology”, International Journal of Benchmarking for Quality Management & Technology, Vol. 2 No. 1, 1995, pp. 38-55. 6. Fortune Magazine, “America’s most admired corporations”, Vol. 127 No. 3, 8 February 1993, pp. 44-7. 7. Green-Armytage, J., “Hewlett-Packard’s profits jump 41%”, Computer Weekly, 24 February 1994. 8. “Hewlett-Packard in figures”, Corporate Slide Set, Hewlett-Packard, 1994. 9. “HP business alignment – driving towards results”, Hewlett-Packard, 1995. 10. Gitlow, H.S. and Gitlow, S.J., The Deming Guide to Quality and Competitive Position, Prentice-Hall, Englewood Cliffs, NJ, 1987. 11. Wargin, J. and Feurer, R., “Hewlett-Packard’s best practices”, Hewlett-Packard GmbH Germany, 1992. 12. “PULS”, Hewlett-Packard, 1992. 13. Platt, L.E., CEO, speech made at Hewlett-Packard Executive Conference, Toronto, 1993. 14. Schädler, T., “Evolving business and organisation capabilities”, Hewlett-Packard, 1993. 15. Patterson, M.L., Accelerating Innovation – Improving the Process of Product Development, Van Nostrand Reinhoild, New York, NY, 1993. Rainer Feurer and John Wargin are with Hewlett-Packard GmbH, Böblingen, Germany, and Kazem Chaharbaghi is based at Cranfield University, Cranfield, UK. Application questions (1) Is Hewlett-Packard a useful benchmark for strategy formulation? Why or why not? (2) How would you define your “process of management? (see p. 7).